Developer GuocoLand reported on Thursday its fiscal second quarter net profit dropped 84 percent on-year to S$10.85 million amid lower sales of residential units.
Revenue for the quarter ended 31 December fell 61 percent on-year to S$142.95 million, it said in a filing to SGX after the market close on Thursday.
The revenue decline was mainly on higher progressive revenue recognition in the year-ago quarter after the Sims Urban Oasia project obtained its temporary occupation permit (TOP) in October 2017, GuocoLand said.
It had lower sales of completed residential units in the second quarter as the company saw its inventory of completed, unsold units decline, the filing said.
Other income also dropped 49 percent on-year in the fiscal second quarter to S$6.55 million, due to the absence of a year-earlier fair value gain on derivative financial instruments, the filing said.
Amid lower sales activity, administrative expenses dropped 28 percent on-year in the quarter to S$19.61 million, while finance costs fell 22 percent on-year to S$34.28 million, the filing said. Cost of sales declined 58 percent on-year in the quarter to S$98.84 million, it said.
For the fiscal first half, net profit dropped 84 percent on-year to S$37.01 million on revenue of S$310.96 million, down 58 percent on-year, GuocoLand said.
In its outlook, GuocoLand said it has a “balanced pipeline of mixed-use, commercial and residential projects, including the integrated mixed-use development Guoco Midtown which had its groundbreaking in November 2018.”
It noted that within Singapore, Urban Redevelopment Authority (URA) data showed private residential property prices had fallen by 0.1 percent in the fourth quarter, after rising 0.5 percent in the third quarter. But office space in core business areas were seeing rising rentals, it said.